Population aging: some economic and social consequences of population aging

The continued participation of older people in the economic life is a key factor to their own well-being as well as that of their nations on the whole. Covering Canada specifically, this paper looks at possible and appropriate policies that can accommodate the demographic fact of life.

The paper observes that demographic change is gradual, seldom having any major effect in the short term, and is rarely considered in today’s important policy decisions. Thus, unless governments adopt a comprehensive, longer-term strategy to address a looming labour shortage and future health care demands, the consequences of population aging could be deleterious.

Conclusions are that:

• population aging is largely the result of demographic momentum, so policy proposals should address the consequences of these trends rather than attempt to change the trends themselves
• yet, the growing diversity of circumstances among the elderly and the capacity of families to provide care across generations affect how the policy implications of an aging population will play out

Moreover, the author introduces three policy proposals to address the population aging challenge:

• retooling immigration systems to maximise economic benefits
• encouraging older workers to remain in the labour force
• increasing health care staffing and optimise service delivery

Specifically, in order to reduce employment barriers for older workers, the paper suggests adopting a flexible policy of phased retirement, whereby older employees can gradually reduce their workweek. Identically, it also recommends reducing incentives for early retirement and increasing incentives for flexible working hours.